News analysis

Debate over strictly business model for tycoons in China

Desertion or just business? Opinion is split over Li Ka-shing's sell-off

A commentary criticising Mr Li Ka-shing (above) for moving money out of China that went viral has sparked a debate over the roles and responsibilities that tycoons should have.
A commentary criticising Mr Li Ka-shing (above) for moving money out of China that went viral has sparked a debate over the roles and responsibilities that tycoons should have.PHOTO: BLOOMBERG

With its gleaming blocks of luxury apartments, office buildings and a shopping mall, the Pacific Century Place occupies a prime 170,000 sq m spot in Beijing.

The landmark property located in the capital's prime Sanlitun area was once one of the key Chinese properties in the portfolio of Hong Kong tycoon Li Ka-shing.

But it has recently become one of the reasons a fiery debate has been ignited around one of Asia's richest businessmen. It reflects what some analysts say is an ideological divide over the Chinese economy, while raising questions about Mr Li's future in China.



    Worth: US$32 billion (S$45 billion)

    Asia's richest man runs Dalian Wanda, a real estate group which controls more than 200 department stores, shopping plazas and luxury hotels

    LI KA SHING, 87

    Worth: US$31 billion

    Self-made billionaire with fingers in many industries in Hong Kong and China, including real estate, ports and mobile phone networks

    JACK MA, 51

    Worth: US$26 billion

    Founder of Alibaba Group, the world's largest collection of e-commerce websites

    MA HUATENG, 43

    Worth: US$16 billion

    Chairman of Chinese Internet giant Tencent Holdings, known for its widely used WeChat and QQ messaging platforms

    Teo Cheng Wee

Pacific Century Place was sold last year for more than US$920 million (S$1.31 billion), becoming at the time the fourth Chinese property disposed by Mr Li and his family in less than a year.

Mr Li and his family have been trimming their Chinese property portfolio since 2011. Their firms had been selling off office and shopping mall projects in Shanghai, Beijing, Nanjing and Guangzhou, fuelling concerns that the astute tycoon was turning bearish on China.

Although admired by many Chinese for his business acumen, Mr Li came under fire after a think-tank linked to state news agency Xinhua published a commentary highlighting these sales, and criticised him for moving his money out of China.

The article went viral, triggering arguments between Chinese netizens over the roles and responsibilities that tycoons should have.

The commentary titled "Don't Let Li Ka-shing Run Away" claimed that Mr Li owed his recent fortunes in China to preferential treatment from Beijing, and opined that he needed to do more charity work and tackle poverty in China.

"The way Li Ka-shing amassed wealth in China in the last 20 years isn't a matter of simple business," said the commentary's writer Luo Tianhao. "As everyone knows, in China, the real estate business and political power go hand in hand. Without political resources, there is no way to do real estate business."

Public opinion is split. In a poll of 46,000 people on the Sina news website, 42 per cent supported Mr Li's actions while 41 per cent were against them.

Those who criticised Mr Li felt that he was deserting the mainland after partaking in the spoils. Mr Li had been among the first developers to enter China, after former Chinese leader Deng Xiaoping began opening up the nation's economy in 1978. "Naive mainland officials! Only now do they know they've been cheated by this old fox Li Ka-shing," said a user on microblog site Weibo.

But many others defended Mr Li's rights as a businessman and argued that enforced restrictions on businesses would only scare more investors away.

He has become a lightning rod for the age-old ideological debate on China's economy between leftists and rightists, which is magnified by a sputtering economy, said Beijing-based sociologist Hu Xingdou. Mr Li has also become unwittingly entangled in issues of patriotism and nationalism because the Chinese have "higher expectations" of him as someone who was Asia's richest man for many years, said Dr Hu. "Many people may feel it's not right for him to leave the market, when China isn't faring well."

The article also came at a time of heightened sensitivities about riches that come from political connections, with China still in the midst of an anti-corruption campaign that has exposed many officials and their ill-gotten gains.

"There's a bigger picture about the perceived unfairness in Chinese society, towards people who have benefited because of connections," noted UniSIM senior lecturer Lim Tai Wei, an East Asia specialist.

Amid the furore, Mr Li himself has come out to say that he continues to be optimistic about the Chinese economy.

Because of the article's links with Xinhua, however, many are questioning if it reflects the unhappiness of China's top leadership towards Mr Li.

But observers have also pointed out that subsequent commentaries in the Chinese media have reduced the swipes at Mr Li, while defending the continued strength of the Chinese economy.

A Qianjiang Evening News commentary on Tuesday said Mr Li belonged to the old Chinese economy when China should be embracing a new model for the Internet age and that "China does not lack a Li Ka Shing, but a Steve Jobs".

"Beijing's leaders are practical and they will work with anyone who can bring value to the country," said Dr Lim. "Li remains an important business voice who is well known to the West. He may not be as influential as before, but he'll continue to play a role."

A version of this article appeared in the print edition of The Straits Times on September 26, 2015, with the headline 'Debate over strictly business model for tycoons in China News analysis'. Print Edition | Subscribe